Advanced Search
MyIDEAS: Login to save this paper or follow this series

The price, quality and distribution of mortgage payment protection insurance: A hedonic pricing approach

Contents:

Author Info

  • John Ashton

    ()
    (Bangor Business School)

  • Robert S. Hudson

    (Newcastle University Business School)

Abstract

Mortgage payment protection insurance (hereafter MPPI) provides varying combinations of accident, sickness and unemployment insurance and is used to protect the mortgage payments of policyholders in the event of a fall in income. Recently the provision of this service in the UK has been heavily criticised for providing poor value for money and for being associated with unhelpful sales techniques especially when sold jointly with a mortgage. Consequently in 2009 the Competition Commission ruled that MPPI should not be sold jointly with lending. In this study we examine whether this prohibition was justified and specifically does the form of distribution, either jointly with the mortgage or independently influence the premium levels. This research question is examined using a hedonic pricing approach with details and premiums of 281 MPPI policies. We conclude that the premiums of policies sold independently are lower than those policies distributed jointly for a given set of benefits and conditions. These findings support to the prohibition of the joint sale of the MPPI with mortgages.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.bangor.ac.uk/business/research/documents/BBSWP11010.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Bangor Business School, Prifysgol Bangor University (Cymru / Wales) in its series Working Papers with number 11010.

as in new window
Length:
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:bng:wpaper:11010

Contact details of provider:
Postal: Gwynedd LL57 2DG
Phone: +44 (0) 1248 383648
Web page: http://www.bangor.ac.uk/business/research/
More information through EDIRC

Related research

Keywords: Mortgage Payment Protection Insurance; Mortgage Credit Insurance; Insurance premium setting; joint pricing.;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Diaz-Serrano, Luis, 2005. "Income volatility and residential mortgage delinquency across the EU," Journal of Housing Economics, Elsevier, vol. 14(3), pages 153-177, September.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bng:wpaper:11010. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Huw Hughes).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.